|Social Security Benefits to Increase in 2003|
Monthly Social Security and Supplemental Security Income (SSI) benefits paid to over 50 million Americans will increase by 1.4 percent in 2003, according to Jo Anne B. Barnhart, Commissioner of Social Security.
"Todays news tells us that inflation continues to be low, which is certainly good news for the elderly and disabled," said Commissioner Barnhart. "Inflation is one of the biggest challenges for people living on a fixed income. The annual Cost-of-Living Adjustment (COLA) ensures that a person's monthly benefit doesn't drop in value over time."
When will the increases take effect?
The increase will be seen in the checks of some 46 million Social Security beneficiaries receive in January 2003. Increased payments to 7 million SSI beneficiaries will begin on December 31.
How is the increase calculated?
Social Security and SSI benefits increase automatically each year based on the rise in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the prior year to the corresponding period of the current year. This year's increase in the CPI-W was 1.4 percent.
Other changes may affect your paycheck
Many workers may also see changes in the Social Security contributions withheld from their paychecks in 2003.
The maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $87,000 from $84,900 in 2002.
As a result of the increase in the taxable maximum in 2003, the maximum yearly Social Security tax paid by employees and employers will increase by $130.20 each for a total of $5394.00. For self-employed workers, it will rise by $260.40 to a total of $10,788.00. Of the approximately 155 million workers who pay Social Security taxes, about 9.7 million will be affected by the higher wage base in 2003.
Medicare program changes for 2003
The Medicare program will also see some important revisions in 2003, including changes in both Part A (Hospital) and Part B (Medical) insurance payments and deductibles.
Detailed information on Medicare 2003 can be found on the Medicare Web site at: http://www.medicare.gov/. A summary report titled, "Medicare & You 2003" can also be viewed or downloaded at: http://www.medicare.gov/publications/pubs/pdf/10050.pdf (Requires Adobe Acrobat free .pdf reader.)